DARREN HERFT TO BE INTERVIEWED UNDER OATH, AS KWICKIE CONTINUES TO RAISE FUNDS

Written on the 3 October 2017 by Ben Hall

THE CEO of tech wreck Guvera, Darren Herft, will be grilled under oath in court over his involvement in the failed music streaming service along with seven other directors and former directors linked to the company's collapse.

The Gold Coast financier will be the main interviewee at a public examination in the Federal Court next month which was called by the liquidator of three Guvera subsidiaries, Eddie Senatore of Deloitte.

Guvera founder Claes Loberg is also expected to give evidence under oath along with Michael De Vere, David Antonelli, Brad Christiansen, Stephen Porch, Phil Quartararo and John Andrew Lemon.

The examinations will be held in Sydney on November 14 and 17.

Guvera's demise began when it attempted to list on the stock exchange last year through a prospectus that valued the loss-making company at more than $1.2b billion.

Its planned IPO was criticised by prominent Australian tech entrepreneurs, including Atlassian co-founder Mike Cannon-Brookes, and the ASX exercised its discretion to knock it back.

Guvera was founded in 2008 by Herft and Loberg and the pair raised the $180 million over four years as they sought to commercialise the service, but the rejection of the IPO was a huge blow.

In FY16, the company made a loss of $81.1 million on revenue of $1.2 million and the music streaming app stopped operating in May after it was blocked for its IPO and the Australian Securities and Investments Commission (ASIC) is now investigating what happened to the $180 million from its 3,000 investors.

News of the examinations comes amid an ongoing investigation by the corporate watchdog ASIC into fundraising efforts by Guvera and another company backed by Herft, video messaging play Kwickie.

Herft and his AMMA Private Equity group own Kwickie, and the Australian Securities and ASIC ruled in July that he cannot allow retail investors to buy shares in Kwickie through a trust structure. Kwickie is still able to raise funds through other channels.

ASIC says it is concerned that some accountants may be harming retail investors by inappropriately providing 'sophisticated investor' certificates and referred directly to Herft's Kwickie business.

"ASIC has made a declaration, to put the issue beyond doubt, that Kwickie International Ltd shares may not be offered to retail investors through a trust structure," ASIC says in a statement.

"ASIC is aware that, in certain recent fundraisings, some accountants have used trust or company structures that purport to allow investors who are not 'sophisticated investors' to receive offers to purchase shares without a prospectus or other disclosure document.

"This has recently occurred in relation to offers of shares by Kwickie International Limited."

Lawyers acting for Kwickie have pointed out that the company still has five ways to raise funds including placing funds from sophisticated and corporate investors, placing funds from 20 non-sophisticated investors up to $2 million over a 12 month period, along with staff and employee share option plans and from retail investors following the release of a prospectus.

Claes Loberg told The Australian newspaper in July that Herft and his investment vehicle AMMA Private Equity were to blame for the demise of Guvera.